Key Takeaways
- • South Korea's presidential office (Cheong Wa Dae) is reportedly considering a fourth deferral of cryptocurrency taxation, according to financial investment industry sources cited by MoneyToday (머니투데이) on October 26, 2026, though officials said nothing has been decided.
- • If approved, the tax would be postponed for the fourth time; it was originally legislated in late 2020 via an Income Tax Act amendment and scheduled to take effect in 2022, but has been deferred three times.
- • Industry participants are relieved by the prospect of more time, but argue the deferral must be used to resolve tax fairness issues, including the treatment of domestic stock investors and users of overseas exchanges.
- • Investor grievances include the lack of loss carryforward deductions and a basic deduction capped at 2.5 million won; under the current plan, gains above that threshold would be taxed at 22% (20% income tax plus 2% local tax).
- • OECD CARF information exchange timing varies: 29 countries, including Canada, Switzerland, Singapore and Hong Kong, begin in 2028, and the United States in 2029, creating enforcement gaps.
Summary
The presidential office in South Korea, Cheong Wa Dae, is considering an additional deferral of cryptocurrency taxation, according to the financial investment industry as reported on October 26, 2026 by MoneyToday (머니투데이). The office is expected to consult relevant institutional investors on the proposal, though an official stated that the matter is under review and that nothing has been decided.
Cryptocurrency taxation was introduced through an amendment to the Income Tax Act at the end of 2020 and was scheduled to take effect in 2022. It has since been deferred three times due to shortcomings in the tax system and investor protection mechanisms. A decision to defer again would mark the fourth postponement. Industry participants have welcomed the prospect of additional time, but commentators argue that the period should be used to address tax fairness, which has become the most contentious issue.
Fairness concerns take several forms. Domestic stock investors currently pay no tax on transactions because the Financial Investment Income Tax has been abolished, so critics argue it is unreasonable to tax only cryptocurrency investors. A second divide separates domestic and overseas exchange users. Transactions on domestic exchanges are comparatively easy to trace, whereas the tax base is difficult to secure for overseas platforms. Critics contend this would concentrate the tax burden on domestic users and encourage capital outflows to overseas markets.
The government has pointed to the OECD Crypto-Asset Reporting Framework (CARF), which would allow cryptocurrency transaction data to be shared among participating countries starting next year. Implementation timing differs, however. According to the National Assembly Budget Policy Office, 29 countries including Canada, Switzerland, Singapore and Hong Kong will begin first information exchanges in 2028, and the United States in 2029, leaving unavoidable reporting gaps in the interim.
Investors have also pressed for changes to the proposed framework, including allowing loss carryforward deductions, which are not currently permitted, and raising the basic deduction, which is capped at 2.5 million won. Under the planned regime, annual cryptocurrency gains above 2.5 million won would be taxed at 22% (20% income tax plus 2% local income tax), with income earned in 2027 declared and paid for the first time in May 2028. An industry official said the atmosphere favors deferral but that the sector cannot yet feel at ease, calling for any postponement to be used to improve these areas.
Cryptocurrency taxation was introduced through an amendment to the Income Tax Act at the end of 2020 and was scheduled to take effect in 2022. It has since been deferred three times due to shortcomings in the tax system and investor protection mechanisms. A decision to defer again would mark the fourth postponement. Industry participants have welcomed the prospect of additional time, but commentators argue that the period should be used to address tax fairness, which has become the most contentious issue.
Fairness concerns take several forms. Domestic stock investors currently pay no tax on transactions because the Financial Investment Income Tax has been abolished, so critics argue it is unreasonable to tax only cryptocurrency investors. A second divide separates domestic and overseas exchange users. Transactions on domestic exchanges are comparatively easy to trace, whereas the tax base is difficult to secure for overseas platforms. Critics contend this would concentrate the tax burden on domestic users and encourage capital outflows to overseas markets.
The government has pointed to the OECD Crypto-Asset Reporting Framework (CARF), which would allow cryptocurrency transaction data to be shared among participating countries starting next year. Implementation timing differs, however. According to the National Assembly Budget Policy Office, 29 countries including Canada, Switzerland, Singapore and Hong Kong will begin first information exchanges in 2028, and the United States in 2029, leaving unavoidable reporting gaps in the interim.
Investors have also pressed for changes to the proposed framework, including allowing loss carryforward deductions, which are not currently permitted, and raising the basic deduction, which is capped at 2.5 million won. Under the planned regime, annual cryptocurrency gains above 2.5 million won would be taxed at 22% (20% income tax plus 2% local income tax), with income earned in 2027 declared and paid for the first time in May 2028. An industry official said the atmosphere favors deferral but that the sector cannot yet feel at ease, calling for any postponement to be used to improve these areas.
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